For some people, things can go wrong when they hire a contractor, who does not do a proper job and threatens to leave the jobsite.
Before anything, the first thing you do is the consult a professional regarding your particular situation. Here you can find only some general information, which may or may not be useful for you.
Here are a few things you can do:
Take pictures of the current situation of the house, as many as needed, showing all the relevant areas, with dates on them.
Contact the state contractors association (where your contractor got his contractor license) and tell them about this situation. Also get their advice.
Look at your contract between you and the contractor. What does it say for: Schedule? Extra work? Completion of the work? payments? It would be very helpful to you if it stated a date of completion and payment terms.
Do NOT pay him anything more at this point, let alone all the cost before finishing the house. The moment you pay him everything, he has the advantage. It may be regarded also as if you are endorsing what he did so far. Don’t do this. If he says he will leave without payment, it probably means he is blackmailing you.
Get at least two other local contractors to give you an estimate of the remaining work by coming to the site. They should give you a free quote. And you will have a much better idea. Also ask their opinion on the current situation. If you proceed with them later, in your agreement make it based on a dollar amount that will not change and a schedule that will not change. State this in your contract. State payment terms based on completing certain milestones. Include photographs of current situation. Write that the contractor understands the current state of the house, aware of what needs to be done and is not entitled to anything extra. Attach a scope of work to the contract as an attachment.
Send your contractor a written notice, stating all the things that went wrong, with dates and demand that he return to work immediately. Tell them that failure to do so in xxx days, will force you to hire another contractor and the costs will be deducted from his contract. This way you are putting him on notice. Send this notice via email, fax and a certified letter. (many cases either will do, but just to emphasize your point). In your email, letter and fax include the pictures you took as an attachment. He has to know you are serious. What portion did you pay him so far? That is also important. The less you paid him so far, the more you have advantage in enforcing your backcharge threat. If you paid him too much already, then the cost of hiring a new contractor is still deductable from him but you will need to ask it by negotiation, if it doesnt work in arbitration and if it doesnt work, in court. Ask a lawyer and / or forensic engineering firm about it.
Call a construction claims lawyer, make appointment for a consultation (some can even do this for free) and show him the contract, photos etc.. and get specific advice from him. The information here is to give you general idea only, without knowing your contract or other specific information and seeing the site. Act only after you consult the claims lawyer and / or the forensic engineering firm.
If he built something not in the plans, the extra area he built, is also something against him, as he deviated from the plans and contract documents without your authorization.
Remember that some contractors like to take advantage of nice people who prefers just to pay him what he wants, and get rid of him, instead of fighting. Do NOT get intimidated by him.
After doing all this, calmly call him and ask him if he is going to comply. Tell him that you do not want to make this a legal issue or backcharge his contract, but if he doesn’t comply, then you will. Actually before you call him, after seeing your written notice, I am sure he will call you and try to intimidate you once again, so you can tell him these… You can also tell him that you will complain to the contractors association.
Remember to pay him AFTER he finishes his work, at least the majority of it, even if you work out a deal with him. Make sure the deal you work out is in writing and be as detailed as possible, stating the absolute max amount remaining to pay him, with payment terms. Pay him everything only after you accept everything to your satisfaction.
Most importantly, hire a competent construction professional and discuss your problem. This is only general advice which may not be suitable for your particular situation.